Multi currency payments and translators

Translation is a world wide necessity and translators have the entire world as their canvas. With the advent of the internet it is easy for service providers and prospective clients to contact each other. As a freelance translator, you may be working for clients across borders and may be paid in multiple currencies. This blog talks about how to manage such payment which was briefly touched upon in another blog on translation and freelancing. There are 2 aspects to receiving payments from abroad: one is the mode of receiving payment and the other is managing exchange rate fluctuations. As far as the first point is concerned you have the following options of getting paid for your translation services: Company issued MasterCard like the One Hour Translation MasterCard, banker’s check, direct transfer (wire transfer) to bank accounts, ACH (Automatic Clearing House), or utilize the services of private providers like Paypal, MoneyBookers, etc. While the direct transfer to your bank account may be the least expensive in terms of service charges, using private service providers such as Paypal etc. may prove to be more expensive. Exchange rate fluctuation is an important factor to consider when receiving payment in different currencies. One way of managing it is to open bank account in the currency in which your client pays you and probably in the country where he/she is based. Thus you may have to open multiple accounts if you have clients from different countries paying you in their local currency. You can choose to transfer the amount from any account to your home currency account when the exchange rates are most favorable. But this approach of having multiple currency accounts may entail more maintenance expenses compared to a single multi currency account even though it will be convenient from the client’s point of view. The next option is to open a multi currency account in a single bank. A multi-currency account is a bank account with a single account number in which you can hold balances in diverse currencies. This type of account gives you the benefit of foreign exchange rate flexibility as with multiple currency accounts. In this type of account you can transfer money in and out in any of the currencies including international SWIFT (Society for Worldwide Interbank Financial Telecommunication) transfers with no restriction.  The maintenance expenses of a multi-currency account are generally less than keeping multiple currency accounts as it has single service fee, single minimum deposit etc. Multi-currency accounts are a good, conservative way to hedge against currency risks or make exchange rate fluctuations work in your favor. Finally utilizing the services of private providers like Paypal etc should be the last option as they involve considerable service charges. Not only you have to pay fees in effecting transfers but the exchange rate may be unfavorable. Typically you may have to bear anywhere between 5 and 10% of the money transferred as fees. Thus you have to carefully weigh the pros and cons of each payment method and decide which one suits you most before sending quotes for the translation job you are about to undertake from across the border!